Reliance Communications seeks a change in cross-holding equity norms

The letter was a part of the telco's recommendations to IMG which was recently set up by the government to study the financial stress of incumbent service providers.ETTelecom | Updated: July 10, 2017, 17:12 IST

NEW DELHI: With an aim to ease financial pressures including debt reduction, Anil Ambani-driven Reliance Communications (RCom) has asked the inter-ministerial group (IMG) to tweak guidelines for cross-holding of equity, TelecomTiger Monday reported.

In a letter dated July 4 to IMG, the Mumbai-based company sought to do away with the 10% cross holding norm so that it can sell equity to existing telecom service providers particularly Mukesh Ambani’s Reliance Jio.

The letter was a part of the telco's recommendations to IMG which was recently set up by the government to study the financial stress of incumbent service providers.

The cross-holding clause was, however, introduced to facilitate a healthy competition in the market.

RCom is eyeing to further earn from allowing a larger chunk of airwaves to new entrant Jio, and to overcome a debt of more than Rs 45,000 crore.

In April 2016, the department allowed radiowaves sharing RCom and Jio nine circles including Mumbai, Assam, Haryana and UP East.

Both companies also entered into spectrum trading deal worth Rs 4,500 crore in January 2017 in 13 circles.

Separately, RCom initiated contempt proceedings in the apex court against the Department of Telecommunications, blaming it for delaying a spectrum sale that would have enabled dues to be paid to Ericsson and lenders.